The “Logistics and Transportation Star” Ltd is considering its alternative investments comprising its investment opportunity set (Investment A - Investment Z). The investments with their relevant cash flows are as follows: Year Investment A Investment B Investment C Investment D Investment E Investment Ζ 0 -600,000,00 € -480,000.00 € -360,000.00 € -240,000.00 € -720,000.00 € -840,000.00 € 1 168,000,00 € 120,000.00 € 180,000.00 € 48,000.00 € 240,000.00 € 300,000.00 € 2 168,000,00 € 120,000.00 € 84,000.00 € 48,000.00 € 240,000.00 € 240,000.00 € 3 180,000,00 € 180,000.00 € 84,000.00 € 84,000.00 € 240,000.00 € 240,000.00 € 4 180,000,00 € 180,000.00 € 84,000.00 € 84,000.00 € 192,000.00 € 168,000.00 € 5 190,000,00 € 190,000.00 € 94,000.00 € 94,000.00 € 190,000.00 € 178,000.00 € c. If Logistics and Transportation Star can invest up to 1,800,000€, which are the investments that it should prefer? Explain your recommendations. d. Rank the investments from the best to the worst according to the Simple Payback method. If Logistics and Transportation Star has as an accepted Payback period of 4 years, which investments would be considered as acceptable? Demonstrate your calculations
The “Logistics and Transportation Star” Ltd is considering its alternative investments
comprising its investment opportunity set (Investment A - Investment Z). The
investments with their relevant cash flows are as follows:
Year Investment A Investment B Investment C Investment D Investment E Investment Ζ
0 -600,000,00 € -480,000.00 € -360,000.00 € -240,000.00 € -720,000.00 € -840,000.00 €
1 168,000,00 € 120,000.00 € 180,000.00 € 48,000.00 € 240,000.00 € 300,000.00 €
2 168,000,00 € 120,000.00 € 84,000.00 € 48,000.00 € 240,000.00 € 240,000.00 €
3 180,000,00 € 180,000.00 € 84,000.00 € 84,000.00 € 240,000.00 € 240,000.00 €
4 180,000,00 € 180,000.00 € 84,000.00 € 84,000.00 € 192,000.00 € 168,000.00 €
5 190,000,00 € 190,000.00 € 94,000.00 € 94,000.00 € 190,000.00 € 178,000.00 €
c. If Logistics and Transportation Star can invest up to 1,800,000€, which are the
investments that it should prefer? Explain your recommendations.
d. Rank the investments from the best to the worst according to the Simple Payback
method. If Logistics and Transportation Star has as an accepted Payback period of 4
years, which investments would be considered as acceptable? Demonstrate your
calculations
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